NBC feels it doesn’t get its proper share from iTunes

NBC Universal’s boss Jeff Zucker is angry. He only made 15mio USD from sales over iTunes last year. There are plenty of postings on the Internets, reporting (German) on this.

I see 2 arguments there:

  • Apple doesn’t want to share it’s hardware revenues with NBC and is “freeriding” on NBC’s content and
  • Apple is refusing to adapt it’s fixed pricing scheme of 1.99$ per TV show to allow some to be sold at a higher (not at a lower) price.

I don’t know whether I should start laughing or crying first. I don’t know if all the reportings are true, but if yes, then some people have lost contact to reality.

“Apple sold millions of dollars worth of hardware off the back of our content.” Why the heck should Apple hand out a share of its hardware sales to NBC? Is it only fair that consumers should pay twice for each content now? And does Siemens pay me for my phone calls which might get routed through Siemens-installed hardware at some Telecoms switchboard? Heck, they are freeriding on my content, on my conversations, so I think I deserve something back.
This argumentation only makes sense in some parallel universe which is actually orthogonal to our world.

The second issue makes more sense. NBC wants flexible pricing, but iTunes strategy is a simple pricing model. This is a free world and if that is Apple’s strategy, it’s their right to stick to that. If NBC doesn’t want to provide their valuable content (some of the shows they want priced higher are aired for free over US tv channels) to Apple under these conditions, they should simply not offer it through them, that is their right too. But since when is it deemed only fair that one side of the value chain can negotiate flexible prices? I can’t remember last time I could negotiate the price of a Music CD in a shop either.

If Music companies still don’t understand that times of automatic and absurdlyconveniently high margins are over, they should start taking some courses somewhere, quickly. And quotes like the following “we know that Apple destroy the music industry -concerning prices- and if we don’t take control, they will do the same to videos.” (freely translated from the German Spiegel article) seem to indicate that Mr Zucker did not understand yet that not Apple is responsible for decreased profits of the incumbants in the music industry.

P.S. This is my private personal rant and has got nothing to do with my employer.